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Thursday, September 13, 2012

Insurance issues for older houses.

The Otago Daily Times reports that insurers in Dunedin are declining to insure houses built before 1935. It may be that this is the case in Christchurch too?

From the beginning of the ODT article:

As many as one in 20 Dunedin house sales are falling through at the last hurdle because insurance companies are declining to insure houses built before 1935.

And for many real estate agents, vendors and purchasers in Dunedin, the situation is beginning to cause headaches.

Insurance Council of New Zealand (ICNZ) finance and regulations manager Terry Jordan said reinsurers of New Zealand insurance companies were focusing more intensely on risk in New Zealand as a consequence of the Christchurch earthquakes.

That was making many insurers more risk averse - particularly when it came to insuring pre-1935 houses.

"They are looking at whether they have been rewired or replumbed. The wiring in pre-1935 houses was rubber-coated - it deteriorates and breaks down, exposing the wires, which can cause short circuits and fires.

"It's based on insurers' experiences over many years - not just since Christchurch."

Mr Jordan said pre-1935 houses could previously be insured under an indemnity policy, but some insurers were now declining insurance until the houses were rewired.

The full article is here.

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